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Tuesday, 27 May 2014

$240Mln Mall-Portfolio Loan Moved to Special Servicing

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Commercial Real Estate Direct Staff Report

The largest loan in the collateral pool for JPMorgan Chase Commercial Mortgage Trust, 2006-LDP7, has been transferred to special servicing because of an imminent technical default.

The loan, commonly referred to as the Westfield Centro Portfolio, has a balance of $240 million, or 7.7 percent of the remaining balance of the CMBS deal. Its transfer was highlighted last Friday by Fitch Ratings in a Daily Special e-mail alert. It's not clear what the technical default might be. But the collateral portfolio hasn't been generating the cash flow needed to service its loan.

It is secured by five shopping centers with a total of 2.4 million square feet that Centro Properties Group in 2006 had purchased from Westfield Group, which kept a 5 percent stake in three of the properties. Centro Properties, of Australia, was acquired by Blackstone Real Estate Partners VI in 2011, and two years later the investment manager took the company public as Brixmor Property Group. But it evidently did not include the five malls in Brixmor's portfolio.

The portfolio of malls has never performed up to expectations and over the past two years it hasn't generated the cash flow needed to fully service its debt. But the CMBS loan has remained current, according to servicer data compiled by Trepp LLC.

The laggard among the five is the Midway Mall, with 588,600 sf in Elyria, Ohio, which is near Cleveland. The property has faced issues since at least 2007, when anchor Steve & Barry's filed for bankruptcy and Dillard's closed its store. It is only 66 percent occupied.

The other properties in the portfolio are Enfield Square, with 559,108 sf near Hartford, Conn.; West Park Mall, with 426,662 sf in Cape Girardeau, Mo.; Eagle Rock Plaza, with 462,823 sf near Los Angeles, and Westland Town Center, with 326,943 sf in Lakewood, Colo.

According to analysis by Barclays Capital, the loan's transfer to special servicer LNR Partners could result in additional interest shortfalls hitting the deal, possibly up to the AJ class, which originally was rated AAA by S&P and Fitch and Aaa by Moody's. The deal's class B so far has been shorted $386,678 of interest.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.


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Additional Info

  • Syndicate to Realpoint: No
  • Sector: Retail
  • Subject: Commercial MBS (CMBS)
  • Deal Name: JPMorgan Chase Comm Mtg Sec Corp 2006-LDP7
  • Valuation: More than $150 million
  • Private: No
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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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